How Do I Choose the Best Bank Account?

As you choose a bank account, you should consider a number of factors, beginning with the specific account type you're looking for. You should consider either a personal or business account, depending on whether it is meant for you or for a company. Regardless of which type of account you wish to open, you should think about how often you may need to draw from it and the amount of interest you want to make on it over time. Secondary considerations you should have regarding your bank account include the ability to access it online and the proximity of bank locations to you.

One of the first things you should consider when choosing the best bank account for you is the right type of account. Personal accounts are typically offered to an individual or household, while business accounts can be opened and used by a company. For both types of accounts, you should also consider whether you need a checking or savings account. A checking account is often used to store money that you can draw upon to pay bills and make other payments. In contrast to this, a savings account is usually intended for you to keep money in without frequent withdrawals.

You should also consider other types of bank account if you want to keep money invested and have it earn interest for you. A money market account, for example, can have a decent interest rate and allows you to access the money within it fairly easily. If you are willing to have your assets less accessible, or “liquid,” then you should consider a Certificate of Deposit (CD). This type of bank account usually earns higher interest but you are penalized if you need to access your investment prior to a set period of time, often several months or years from the deposit date.

As you are considering different institutions at which to open your bank account, you should also think about how accessible you want your funds to be. If you prefer to do a great deal of online banking, for example, then you should choose an account that gives you numerous tools for doing so. You should also look for a bank with locations near you, allowing you to make deposits and withdrawals as needed with little hassle.

Different banks may also charge various fees for a wide range of services or issues. You should consider monthly fees that a bank might charge you. Many institutions only charge a fee if you do not keep a minimum amount in your bank account. Competing banks can also have different policies regarding overdraft fees and protection, as well as minimum deposits for opening a bank account, which may also be factors to consider.